Gold prices soften amid thin trade

KOLKATA: Gold prices softened a tad in the spot and futures markets on Tuesday in line with the trend in international markets as traders awaited further signals from insurgency-hit Iraq.

The August contract of gold on MCX traded at Rs 27,608 per 10 gm in the morning session, down almost Rs 70 from Monday’s closing. The metal touched an intraday high of Rs 27,647 per 10 gm and an intraday low of Rs 27,585.

In the spot market price dropped Rs 300 per 10 gm to Rs 28,200. "Trading volumes have come down. The market is completely flat. Prices are range bound and in a consolidation mode. This trend is likely to continue this week," said Dharmesh Bhatia, deputy vice president (research), Kotak Commodities.

Bullion dealers said prices could fall further in the days ahead. "Gold has eased as investors await development in violence wracked Iraq. If the geopolitical tension settles in Iraq, gold will fall further. We do not see an immediate spike in rupee which could make gold costlier," said Kapil Parekh, director, Indian Bullion & Jewellers Association.

In the international market, bullion for immediate delivery was 0.3% down to $1,313.98 an ounce and traded at $1,314.94 at 2:01 pm in Singapore, according to Bloomberg generic pricing. Gold rose to $1,322.12 on June 20, the highest level since April 15, after the Federal Reserve said it would keep interest rates at almost zero for a considerable time even as the economy improved.